Institutional Selling Driving the Biotech Blues

Despite great biotech success stories in 2018 highlighted by last week’s acquisition of gene therapy developer AveXis, large biotech stocks have been plagued by institutional selling over an extended period. There has been a growing performance split between smaller promising biotechs and their major biotech peers. From competitive pricing pressure to expiring patents to Trump, several leading biotechs are being weighed down by institutional selling pressure.

Celgene’s share price hasn’t been the same since the company slashed its 2020 revenue forecast of more than $21 billion. This lower outlook precipitated institutional selling highlighted by the major negative spike at 1 and minor spikes that have followed. Despite a lower share price there still remains no institutional interest in Celgene.

While Allergan holds the favorable distinction of offloading its generic business to Teva at the top of the market, its shares have been under heavy institutional selling pressure since the negative spike at 1.

The institutional trend of Biogen is more “favorable” at neutral (blue line) over the past three years though still under the influence of selling all the way back in 2015. The absence of negative spikes since the initial spike at 1 has led to a flattish institutional trend.